“One evidence of that is that you’ve got a lot of IPOs at the end of the year and it’s a sign that the market’s had a good run; we are cautious about the pricing," Mr Barker said.

Among the companies that listed last year were foreign exchange ­provider
­OzForex
, insurance broker
Steadfast
and private health insurance comparison website
iSelect
, which suffered a dismal debut on the stock exchange.

“Many of the IPOs that came about were very fully priced, so we didn’t take them up. We’re in the medium to long-term [investors’ camp], so we might trim a few of our positions if they are overpriced or risky."

Mirrabooka gleaned 17 per cent returns for investors in the six months to December 31. The LIC, which invests in small and mid-cap companies, beat the benchmark index’s 14.5 per cent over the same period.

The LIC posted a 24.1 per cent return for the 12 months to December, outperforming the benchmark’s 8 per cent.

Mirrabooka has a market value of about $368 million and holds ­$20 million in cash.

Related Quotes

Company Profile

Mr Barker said stocks including home building products manufacturer
James Hardie
, online real estate ­advertising company
REA Group
and financial services group
Equity ­Trustees
have contributed to the LIC’s performance.

Other companies including
Bega Cheese
, which withdrew from a three-way battle for
Warrnambool Cheese & Butter
late last year,
iProperty Group
and
Freedom Foods Group
also helped the LIC’s performance in the six months to December.

Mirrabooka netted a profit of $4.4 million for the six months to December 31, down from $6.3 million. Last year’s profit had a $2 million boost from after-tax gains in the market value of Hastings Diversified Utilities Fund, which was taken over by APA Group.

“The net operating result, which measures the underlying income generated by the portfolio, was $4.4 million, up marginally from $4.3 million last year," the company said.

Mirrabooka investors will pocket a 3.5¢ per share dividend for the six months.

Mr Barker expects Australian investors to pump more money into the equities market this year as the search for yield continues, amid anaemic returns from term deposits and cash.

“Everybody realises that we’re still in a pretty risky environment economically but in the context of interest rates being pretty low, where do you go for a better return?" Mr Barker said.

“There are parts of the stockmarket that are still going to give you a good return but I suspect that people might feel the market is a bit overpriced."

Mirrabooka also added new companies to its portfolio in 2013, including
Washington H. Soul Pattinson
,
Caltex Australia
and
TPG Telecom
.